When buying an online term insurance plan, Janmejay Singh (35) was asked if he consumestobacco in any form. Singh, who had quit smoking eight months ago, selected the ‘non-smoker’ option. On payment, the company asked him to go for a health check for his Rs 50-lakh policy. When the reports were out, the life insurer told him he would need to pay extra premium, as the tests showed he consumes tobacco.
Life insurance companies need an individual to abstain from smoking for an extended period to classify as a non-smoker. Only then will the premium be reduced. An Aegon Life Insurance spokesperson says the company requires a five-year period of abstinence. Pawan Mahajan, head of underwriting at Bajaj Allianz Life Insurance, says the company follows the same tenure. Niraj Shah, director - marketing, strategy & products at PNB MetLife, says the company has a lower period.
The difference in premium between a smoker and non-smoker varies widely. For Bajaj Life, it is between five per cent and 25 per cent; for Aegon Life Insurance, it can be between 30 per cent and 50 per cent and for PNB MetLife, it is 20-25 per cent.
If you have kicked the cigarette butt and occasionally use an alternative such as nicotine patch or chewing gum or e-cigarettes to satisfy the urge and not relapse, you have ruined your chances of getting a non-smoker premium for a life insurance plan. Insurers will consider you as a smoker if you have used these alternatives, says Mahajan. Smoking occasionally, too, will mean you will need to shell out higher premiums.
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